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High Interest Save Account
Real Time Rating™
Bonus interest with conditions
Online banking
Linked account required

*Deposit $200+ each month

Winner of Best Savings Account Young Adults, Best Savings Account Regular Savers, RateCity Gold Awards 2023

Balances up to $250,000 - Max Rate 5.00%* p.a.
Balances above $250,000 - Max Rate 0.10% p.a.
Maximum rate
Base rate
Total interest earned
Maximum monthly interest







Reward Saver
Real Time Rating™
Bonus interest with conditions
Intro offer rate
App banking
Online banking

*To earn bonus interest the account holder must make a minimum $50 deposit and no withdrawals per month. If bonus interest criteria are not met for the calendar month, both the Standard Variable Bonus Interest and Introductory Fixed Bonus Interest Rate are forfeited.

Balances up to $1,000,000 - Max Rate 5.25%* p.a.
Balances above $1,000,000 - Max Rate - p.a.
Maximum rate
Base rate
Total interest earned
Maximum monthly interest



Not Applicable




What is a high interest savings account?

Most banks and deposit-taking institutions (DPIs) in Australia offer either a transaction account or a savings account, or a combination of the two. With a transaction account, you earn less interest on your deposit, but you can withdraw or spend the money in the account more easily. On the other hand, a savings account is designed to earn you higher interest while limiting withdrawals. Some people may prefer opening a high-interest savings account which can help them build up their savings faster while imposing more conditions on the use of the money.

The higher interest offered on these accounts is meant to incentivise saving, but you need to make regular deposits to boost your nest egg. Equally, by making fewer withdrawals, the money in the account will accumulate faster. 

Check the account provider’s terms and conditions to see if you need to maintain a minimum balance or deposit a fixed amount every month. Some providers may limit the number of withdrawals you can make and impose penalties, such as reducing the interest rate, if you withdraw more often. In addition, banks may require you to link your high-interest savings account to a transaction account, which can be used for withdrawals and ensure you access the savings account less often

How does a savings account earn interest?

High-interest savings accounts accelerate the growth of your savings by compounding the interest and adding that to the amounts you deposit. Compound interest is calculated as a percentage of the savings account balance and paid by the account provider, usually monthly or annually. 

As a result, interest earned on your savings in the past is also accounted for, not just the amounts deposited, in effect adding interest on interest. Regularly depositing even small sums of money into the account can translate into a significant increase in your savings. 

Suppose you opened a high-interest savings account in an Australian bank offering two per cent interest, compounded monthly, with an initial deposit of $100. The account provider would include the interest earned on this sum in the first month when calculating the interest earned for the second month. Accordingly, even if you didn’t deposit any amount in the second month, you’d earn more interest than you did in the first month. 

On the deposit of $100, you’d earn $2 in interest in one year, $4 by the end of the second year, etc. After five years, your account balance would total $111. However, if you deposited $10 every month in addition to the initial deposit, your account would have $741 in it at the end of five years. See the table below to understand in detail how compound interest works in these two cases.


     Amount deposited ($)

Interest earned ($)

Amount deposited 
($10 per month, $)

Interest earned ($)

 Final Balance 110.40 - 741-
 1 100 2 100+120 = 220
 2 0 2.04 1209
 3 0 2.08 12017 
 4 02.12 120 28
 5 0 2.16 120 41

What are the types of savings accounts with higher interest rates?

High-interest savings accounts are usually either introductory savings accounts or conditional savings accounts, as described below.

  • Introductory savings accounts:These typically offer a higher rate, sometimes called a promotional rate, for the first few months after you open the account, after which you earn interest at the base rate. Consider checking the difference between the promotional rate and the base rate prior to opening an account.

  • Conditional savings accounts: As the name suggests, these accounts require you to meet specified conditions such as maintaining a minimum balance, making regular deposits, making few or no withdrawals in a calendar month, and so on. 

When comparing high-interest savings accounts, you may also come across online savings accounts which can be operated through the provider’s Internet banking site or mobile app. Some purely digital providers may also offer high-interest online savings accounts with no fees, although the lack of a physical location limits customers’ options for getting any complaints resolved. In most cases, you’ll need to link the online savings account to a transaction account, either with another bank or with the same provider. Remember to check if operating these transaction accounts involves paying admin or transaction fees.

Note that you need to declare the interest you earn from your high-interest savings accounts on your tax return. You can check your annual interest income through the bank’s website or app, but you may receive a statement from the bank as well. If you've linked your Tax File Number (TFN) to your MyGov account, the tax you owe on the interest earned will probably be calculated automatically.

RateCity tip for savers

Remember that any interest you earn from your high interest savings account will need to be declared on your tax return. At the end of the financial year, you should get a statement or be able to access the amount through your internet banking. In Australia, if you've linked your Tax File Number (TFN) to your MyGov account, the calculation of tax needing to be paid on your interest earned should happen automatically. 

Why should I get a high-interest savings account?

Opening a high-interest savings account has several benefits, as elaborated below. 

  • Low risk, low cost: You can compare and choose a high-interest savings account that doesn’t charge high account fees and thereby preserve more of your savings. At the same time, most banks and other regulated financial institutions that hold an Australian Credit Licence are backed by the Australian government guarantee, which protects deposit account balances of up to $250,000 in the event the financial institution collapses. For this reason, savings accounts represent a lower risk as compared to other investment options like stocks.

  • Fast-tracking your goals: If you’ve set yourself a financial goal, a high-interest savings account can offer the ideal path to realise it. Depending on the account type you choose and the kind of restrictions you’re comfortable with, you could even qualify for a bonus interest rate and speed up your journey.

  • Ease of opening and closing accounts:A term deposit may get you better rates than a high-interest savings account, but you won’t have any access to your money for the duration of the deposit. The lack of a lock-in period allows you to move your money out of your high-interest savings accounts into a more lucrative investment whenever you prefer.

  • Linked accounts: While you can opt for a high-interest savings account with fewer access conditions, you can earn more interest by minimising withdrawals. Instead, you could link the account to a transaction account and transfer funds between the two accounts when necessary. You can also set up direct debits to deposit a portion of your income into your savings monthly. Also, some account providers offer the benefit of rounding up debit card purchases to the nearest dollar and sending the spare change into your savings account instead. You can also choose other dollar amounts to round up to instead of the nearest dollar.

What makes for a good high-interest savings account?

Like any other financial product, a good high-interest savings account should suit your financial circumstances and provide an ideal investment option. Comparing savings accounts offered by different providers is a recommended way of deciding whether the account’s benefits extend beyond the interest rate. You may want to consider the following factors.

How to find a good high-interest savings account

  1. Look at interest rates: If you’re looking to earn more interest over the short term, an account offering a promotional rate might work for you. However, if you want to grow your savings consistently over the long run, look for a conditional savings account with a suitable set of restrictions.
  2. Consider any fees: These days, many savings accounts don't charge any fees, especially online savings accounts. Make sure you check the account terms to see which fees are permanently waived and which may apply to some transactions.
  3. How a variable cash rate can affect your savings: High-interest savings accounts often come with variable interest rates, which can change based on the market. Any change in the Reserve Bank of Australia's cash rate can influence the interest rate offered to you. If you prefer greater certainty regarding the growth of your savings, consider opening a high-interest term deposit.
  4. Features and facilities: The amount of convenience you expect can be another factor. For instance, online savings accounts can get you a higher interest rate and can be operated more conveniently, but you may not have direct access to bank officials at a branch if you need to resolve any account-related issues.
  5. What happens when you withdraw funds: You may lose out on earning interest at a higher rate if you make too many withdrawals from a conditional savings account. You could probably divide your deposit between a transaction account and savings account if you anticipate withdrawing money often.

Are high-interest savings accounts worth it?

Making any investment work for you can require taking a well-informed, smart approach and looking at the long-term use of the savings accounts offering high interest. You have to stick to the account terms diligently for the entire time you operate the account, but you also have to decide when to move your money into a more beneficial investment option. For instance, you could save up a certain amount and use it to pay the deposit when buying a house. Alternatively, you could set aside a part of your savings for trading in the stock market. 

Saving up money need not always be an investment - you may need the cash for emergency expenses such as hospitalisation or house repairs. You could also accumulate a vacation fund or a nest egg for your retirement. 

Irrespective of your reason for saving, you’ll need some amount of financial discipline to ensure you keep depositing funds regularly and earn the maximum interest possible. Also, remember that even the best high-interest savings account may not always be the most suitable for your needs, and you should compare different accounts periodically to see if you can save more by opening a different account. 

This article was reviewed by Personal Finance Editor Alex Ritchie before it was published as part of RateCity's Fact Check process.

Frequently Asked Questions

What is a good interest rate for a savings account?

A good rule of thumb to keep in mind with savings accounts is to look for a rate that is higher than the CPI inflation rate. This number is constantly changing, so check the Reserve Bank of Australia’s page. If you aren’t earning interest above this then the value of your money will go backwards over time.

How to make money with a savings account?

Savings accounts make you money by earning interest on your savings. The more money you deposit, the longer you leave it in the account, and the higher the account’s interest rate, the more interest you’ll be paid by the bank or financial institution, and the more your wealth will grow.

To make sure your savings account makes money and doesn’t lose money, it’s important to maintain a large enough minimum balance that the annual interest earned exceeds any annual fees charged on the account.

Who has the highest interest rates for savings accounts?

As banks frequently change their rates, the most accurate way to know who currently has the highest interest rate is to use a savings account comparison tool.

Do I have to claim interest on my savings account?

When you lodge your income tax returns, you must include in the documentation all your sources of income, including bank interest. Your bank will report any interest you earn on the funds in your savings account to the Australian Tax Office (ATO). When the ATO then compares this information with your tax returns,  you also need to have mentioned the interest earned. If there is any discrepancy, you’ll receive a letter from the ATO. 

Avoid this situation by ensuring you receive your bank statement with interest noted. Then declare the interest in your tax returns and pay the tax that’s applicable based on the income tax rate.

You only need to claim your share of the interest earned for joint accounts. If you manage an account for your child and receive or spend money via this account, you will also need to report any interest earned from said account.